Hundreds of thousands to escape mortgage crisis in boon for house prices
But Aaron Strutt, of broker Trinity Financial, said lenders had already started to cut interests well below levels north of 6pc seen in late 2022 on the back of falling inflation.
“Things are clearly a lot better,” he said, adding that some lenders were already offering below 4pc interest fixed deals.
“If your mortgage is coming up for renewal over the next six months it makes sense to book a rate and make sure you’re covered.”
“The general expectation is that rates will get cheaper, but there’s no guarantee,” he said.
Homeowners will be able to remortgage and take advantage of 3pc rates by 2025, according to a forecast by Capital Economics.
Analysis of figures from the banking trade body UK Finance show that on top of 1.6m households protected by five-year fixes there are more than 75,000 borrowers signed up to fixed interest periods of more than five years.
In addition to this, more than half of homeowners in Britain do not have a mortgage. This provides another layer of protection for the housing market from distressed sales caused by high borrowing costs.
David Hollingworth, associate director at L&C Mortgages, said: “The rates have shot up because there is something of a lag period.
“The big benefit of that is as rates have risen rapidly many [borrowers] have been protected from those increases.
“There’s a lot who will be coming towards the end of their fixed rate. The most unfortunate ones would have already come to that point and had to refinance.”
He added: “Thankfully it looks like inflation is coming under control for all the external reasons that drove it up in the first place.”
The Bank of England is expected to ease rates to around 3pc by the middle of the decade allowing lower interest deals to come back onto the market.